Regulations and compliance
Procurement thresholds
Written by Justin Cesman, CEO of Skim. Last reviewed:
- Definition
- Procurement thresholds are the financial values, set in Schedule 1 of the Procurement Act 2023 and revised every two years, that decide which rules a UK public contract follows. A contract estimated at or above the threshold (including VAT) triggers full regulated procurement; below it, lighter rules apply.
Key takeaways
- From 1 January 2026 the main UK thresholds (inc VAT) are £135,018 for central government goods, services or works, £207,720 for sub-central authorities, and £5,193,000 for works contracts (PPN 023).
- Thresholds are calculated on the estimated total contract value including VAT and including any options or extensions — not the annual or per-call-off value.
- Under the Procurement Act 2023 there is one combined goods/services/works threshold per authority type; the separate supplies and services figures from the old regulations have gone.
- The light touch regime threshold stayed at £663,540 for 2026 — only it and Welsh-regulated contracts were not reduced; the international thresholds fell because the pound strengthened against the SDR.
- Below the main threshold, a notifiable below-threshold contract (£12,000 inc VAT for central government, £30,000 for other authorities) still requires a below-threshold tender notice on the central digital platform.
How it works
UK public procurement runs on a tiered system, and the tier a contract falls into is fixed by its estimated value against the thresholds in Schedule 1 of the Procurement Act 2023. The value is calculated on the whole contract, inclusive of VAT, across its full life — including any extension options — not just the first year or a single call-off. Get the estimate wrong and the wrong rulebook applies.
From 1 January 2026 the main thresholds (all inclusive of VAT) are: £135,018 for a contract for goods, services or works awarded by a central government authority; £207,720 for the same awarded by a sub-central authority; and £5,193,000 for a works contract. Light touch regime services sit at £663,540 (unchanged for 2026), and a light touch concession at £5,372,609. These figures replaced the January 2024 set (£139,688 / £214,904 / £5,372,609) and were reduced because the thresholds are recalculated every two years against the WTO Government Procurement Agreement to adjust for currency movements.
At or above the relevant threshold, the full regime applies: the procurement is advertised through a tender notice on the central digital platform and published on find a tender, a defined procedure is run, award criteria are assessed, and a standstill period must pass before the contract is signed. Certain services fall under the lighter light touch regime, which carries its own higher threshold of £663,540. Below the threshold but at or above £12,000 (central government) or £30,000 (other authorities) inclusive of VAT, the contract is a notifiable below-threshold contract: lighter rules apply, but a below-threshold tender notice must still be published before the opportunity is advertised elsewhere.
One structural shift matters for reading older guidance. Under the previous Public Contracts Regulations 2015, supplies and services carried separate threshold lines. Under the Procurement Act 2023 they are merged into a single goods, services or works figure per authority type, so any table still showing a distinct supplies-versus-services split predates 24 February 2025 and no longer reflects the live regime.
UK procurement thresholds from 1 January 2026 (inclusive of VAT)
| Contract type | From 1 Jan 2026 | Previous (1 Jan 2024) | Change |
|---|---|---|---|
| Goods, services or works — central government authority | £135,018 | £139,688 | Reduced |
| Goods, services or works — sub-central authority | £207,720 | £214,904 | Reduced |
| Works contract (general) | £5,193,000 | £5,372,609 | Reduced |
| Light touch regime services | £663,540 | £663,540 | Unchanged |
| Light touch concession contract | £5,372,609 | £5,372,609 | Unchanged |
| Concession contract (general) | £5,193,000 | £5,372,609 | Reduced |
| Notifiable below-threshold — central government | £12,000 | £12,000 | Unchanged |
| Notifiable below-threshold — other authorities | £30,000 | £30,000 | Unchanged |
Under the Procurement Act 2023
Reviewed
Which thresholds apply depends on when the procurement started. The Public Contracts Regulations 2015 govern procurements commenced before 24 February 2025; the Procurement Act 2023 governs those commenced on or after that date. The Act carries the threshold concept over but changes the framing: thresholds now sit in Schedule 1 and merge the old separate supplies and services lines into one combined goods, services or works figure per authority type. The amounts themselves are reset every two years against the WTO Government Procurement Agreement — the latest reset took effect on 1 January 2026 via the Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 and PPN 023, lowering most figures (central government to £135,018, sub-central to £207,720, works to £5,193,000, all inclusive of VAT) while the light touch threshold held at £663,540. Apply the revised amounts to any procurement commencing on or after 1 January 2026.
Sources: GOV.UK — PPN 023: 2026 Threshold Amounts · The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 (legislation.gov.uk) · GOV.UK — Procurement Act 2023 guidance: Thresholds
Why it matters for bidders
Thresholds set the rules of engagement before a word of your bid is written. Above the relevant figure you face standardised, advertised competition with a defined procedure and a standstill period; below it the process is lighter but less predictable, often a closed quote among a handful of suppliers. Knowing which regime applies tells you how visible the opportunity will be, how long it will take, and how much rigour to invest. The figures also moved this year — the January 2026 reset pulled the central government threshold down to £135,018, so a contract that was below-threshold in 2025 can now be a full regulated procurement, and a published valuation sitting just over a line is a signal worth checking against find a tender. Reading that boundary correctly, with the discipline of teams who have won more than £3bn in UK and EU public contracts, is the difference between chasing the right opportunities and wasting effort on the wrong process.
How Skim helps
Skim's Opportunity Discovery agent classifies every opportunity by its threshold regime, flagging whether a contract sits above the international threshold — full advertised competition on the central platform — or in the lighter below-threshold tier, so you know what process and timeline to expect. Its Bid Analysis agent reads the estimated value and procedure against the current thresholds, so you calibrate the rigour of your response to the regime that actually applies.
Frequently asked questions
- What are the UK procurement thresholds for 2026?
- From 1 January 2026 the main UK thresholds, inclusive of VAT, are £135,018 for goods, services or works awarded by a central government authority, £207,720 for a sub-central authority, and £5,193,000 for a works contract. Light touch regime services remain at £663,540. The figures are set in PPN 023.
- Are procurement thresholds inclusive or exclusive of VAT?
- UK procurement thresholds are inclusive of VAT. Under the Procurement Act 2023, a contract is only a public contract where its estimated value, including VAT, is at or above the relevant Schedule 1 threshold. The estimate covers the whole contract life, including any options or extensions, not the annual value.
- Why did the UK procurement thresholds change in 2026?
- Thresholds are recalculated every two years to keep the UK aligned with the WTO Government Procurement Agreement, adjusting for currency movements. Because the pound strengthened against the agreement's reference unit, the 1 January 2026 reset lowered most thresholds, though the light touch regime and Welsh-regulated figures were left unchanged.
- What is a below-threshold contract under the Procurement Act 2023?
- A below-threshold contract is a public contract estimated below the main Schedule 1 threshold. Where its value is at least £12,000 (central government) or £30,000 (other authorities) inclusive of VAT, it is a notifiable below-threshold contract: lighter rules apply, but a below-threshold tender notice must be published on the central digital platform before advertising elsewhere.
- How often are UK procurement thresholds updated?
- Every two years. The UK must give the WTO Government Procurement Agreement the sterling equivalent of its thresholds, and the revised amounts take effect from 1 January of each even-numbered year to adjust for currency fluctuations. The most recent update took effect on 1 January 2026; the previous set applied from 1 January 2024.
Sources
Related terms
Public Contracts Regulations 2015(PCR 2015)
The Public Contracts Regulations 2015 (PCR 2015) are the UK statutory instrument (SI 2015/102) that governed public procurement in England, Wales, and Northern Ireland from 26 February 2015. PCR 2015 still applies to procurements commenced before 24 February 2025, when the Procurement Act 2023 took over.
Procurement Act 2023
The Procurement Act 2023 is the law governing most UK public procurement, in force since 24 February 2025. It replaces the Public Contracts Regulations 2015 and three other regimes with one set of rules, introducing the competitive flexible procedure, a central digital platform, and a published debarment list.
Contracts Finder
Contracts Finder is the UK government's free, Cabinet Office-run portal where public buyers publish lower-value contract opportunities and award notices. It covers contracts above £12,000 including VAT for central government and £30,000 including VAT for sub-central bodies such as councils, NHS trusts, and universities.
Find a Tender(FTS)
Find a Tender (FTS) is the UK government's central digital platform for publishing public procurement notices above the threshold, replacing the EU's Official Journal (OJEU/TED) after Brexit. Under the Procurement Act 2023, FTS carries all regulated above-threshold notices for England, Wales, Scotland and Northern Ireland.
Light touch regime(LTR)
The light touch regime (LTR) is a simplified UK procurement regime for specified social, health, education, and similar services delivered to people. It applies a far higher threshold — £663,540 including VAT — and lets buyers design their own award process instead of following the standard procedures.
Standstill period(Alcatel period)
The standstill period is a mandatory pause between a public buyer announcing a contract award and signing it, giving unsuccessful bidders time to challenge. Under the Procurement Act 2023 it is at least eight working days from publication of the contract award notice; under the Public Contracts Regulations 2015 it was ten calendar days.